There have already been several changes in the past five years when it comes to the minimum energy efficiency standards (MEES) and EPC ratings, and now the government is further emphasising its pledge on green energy by introducing new legislation for commercial property leasing.
But what are the changes, and how will they affect your property? Dale Smith, founder and director of residential and commercial conveyancing firm Grey-Smith Legal, explains all…
Going for green
Back in April 2018 the government introduced new legislation to tackle the leasing of unsuitable premises by making it unlawful for a landlord to grant a new tenancy on a commercial property with an EPC rating lower than E. The emphasis here is on new, so existing properties could continue to be leased. However, in 2020 the government released its energy whitepaper which set out the steps it must take in order to ‘power our net zero future’ and meet its commitment to reach zero emissions by 2050. One of the changes it has pledged to make concerns existing property leasing. This means that, as of April 2023, it will also be unlawful to continue renting a property with an EPC rating of less than E, or indeed, renew a lease too.
Upgrade your EPC
There are several changes you can make to improve the EPC rating your property is given. For commercial property, this includes:
Replacing your boiler
Heating and hot water can account for up to half of your monthly expenditure. Replacing an old boiler with a new, energy-efficient one can typically save you up to 25 per cent if you choose a condensing model. But not only will it save you money, it will also improve the energy efficiency in the building, and, as a result, the EPC rating too. You could also consider replacing other items such as refrigerators, air conditioning and lighting too. If you’re unsure where to start, the government has a list of independently verified energy-efficient products.
Installing roof and wall insulation
Many old commercial properties do not have any insulation, but a well-insulated building can significantly reduce the amount of energy lost, improving your EPC rating in the process. High R-value materials are the most effective, and while you may be able to install some products yourself, a qualified professional will have the skills to ensure you get the maximum thermal performance.
Installing double-glazing
You could save 10 to 20 per cent of energy by replacing single glazed windows and doors. Doing so will mean less heat is lost to the outside, lowering your energy bills and keeping the building warmer. Not only will the ongoing cost be lower than before, but the EPC rating will improve too.
Installing a renewable energy source
If you have the space and budget to allow for it, install renewables such as solar panels, groundsource heating or biomass boilers. Doing so will ensure your business is at the forefront of sustainability initiatives, as well as raise the EPC value of the property.
Support for businesses
If this sounds expensive, and you are worried about having the budget to pay for the necessary improvements, you may be eligible for support. There are a number of government schemes offering loans, grants and subsidised energy-saving measures to help businesses reduce their impact on the environment.
Contacting your local council is a good approach as they will often provide funding for energy efficiency or sustainable business growth plans. Some initiatives may also be available for business innovation funding.
Business grants may be available from your energy company too, though these will likely depend on the size of the business, location and sector. You could also try searching for free grants online.
Act now
We are fast running out of time to make the necessary changes to buildings before the new legislation is introduced. By acting now, you will ensure you can continue to use and lease your commercial properties and avoid any nasty surprises further down the line.
